Annual Report and Financial Statements 30 June...

Annual Report and Financial Statements

30 June 2011

1

Chairman’s Report This is the third and final annual report for Bay Broadband Ltd and covers the period

1July 2010 until 30th June 2011.

The company was set up as a subsidiary company under BOPLASS Ltd, the shared

services company owned by the eight local authorities in the Bay of Plenty. Its

purpose was to provide a low cost legal entity to facilitate and promote the

development of broadband capability and reach in the Bay of Plenty.

The company was legally constituted on 17th July 2008 and the inaugural meeting of

director’s was held on 1st August 2008. The directors are made up of 5 directors from

BOPLASS Ltd, two independent directors and one further independent director from

the telecommunications industry. Three positions are currently vacant.

The company ceased trading in June 2010 and this report is issued as a formality

prior to de-registration of the company.

G Snelgrove Chairman

2

Statement of Intent and Statement of Service Performance

The company is covered by the Statement of intent for BOP LASS Ltd which

includes the following statement:

“This statement of Intent covers BOP LASS Ltd and any subsidiary company

established in pursuance of the objectives herein.”

Bay Broadband Ltd ceased trading in June 2010, as such no performance targets

were included in the Statement of Intent for the 2011 year.

Accordingly, there is no performance information to report for the year ended 30

June 2011 because the company did not trade during the year.

3

Directors’ Declaration In the opinion of the directors of Bay Broadband limited, the financial statements and

notes on pages 8 to 20,

comply with New Zealand generally accepted accounting practice and give a

true and fair view of the financial position of the company as at 30 June 2011

and the results of operations for the twelve months ended on that date, and

have been prepared using the appropriate accounting policies, which have

been consistently applied and supported by reasonable judgments and

estimates.

The directors believe that proper accounting records have been kept which enable,

with reasonable accuracy, the determination of the financial position of the company

and facilitate compliance of the financial statements with the Financial Reporting Act

1993.

The directors consider that they have taken adequate steps to safeguard the assets

of the company, and to prevent and detect fraud and other irregularities. Internal

control procedures are also considered to be sufficient to provide reasonable

assurance as to the integrity and reliability of the financial statements.

The directors are pleased to present the financial statements of Bay Broadband

Limited for the 12 months ended 30 June 2011.

For and on behalf of the Board of Directors:

4

Company Directory

Nature of Business Facilitator/incubator of broadband

infrastructure Registered Office CST Nexia Limited P O Box 76 261 Manukau

City

Incorporation Number 2147211

Incorporation Date 17 July 2008

IRD Number 100-207-435 Directors Russell George

Peter Guerin Glenn Snelgrove Miriam Taris David Gatland

Shareholder BOPLASS Ltd

Auditor Audit New Zealand

Bankers The National Bank

Solicitors Cooney Lees and Morgan

5

Audit Report

8

Note 2011 Actual ($)

2011 Budget

($)

2010 Actual ($)

IncomeGrant from BOPLASS Ltd 542 0 17,867Other revenue 0 0 40,993

Total Income 2 542 0 58,860

ExpenditureAccounting & Tax 0 0 3,052Audit Fees 0 0 4,000Other Administrative Expenses 48 0 (1,509)Other Expenses 429 0 7,930

Total Expenses 3 477 0 13,473

Surplus/(Deficit) Before Tax 65 0 45,387

Income Tax Expense 4 (200) 0 200

Surplus/(Deficit) After Tax 265 0 45,187

Other Comprehensive IncomeOther Comprehensive Income 0 0 0Total Comprehensive Income 265 0 45,187

The accompanying notes form part of these financial statements.

Bay Broadband LimitedStatement of Comprehensive IncomeFor the year ended 30 June 2011

9


2010 Actual ($)

Balance at 1 July 2010 (265) (45,452)

Total Comprehensive Income 265 45,187

Capital Contribution from Owners 0 0

Balance at 30 June 2011 0 (265)


Bay Broadband LimitedStatement of Changes in EquityFor the year ended 30 June 2011

10


2010 Actual ($)

AssetsCurrent AssetsCash and cash equivalents 5 0 3,920Debtors and other receivables 6 (0) 15

Total Current Assets 0 3,935

Total Assets 0 3,935

LiabilitiesCurrent LiabilitiesCreditors and other payables 7 0 4,200

Total Current Liabilities 0 4,200

Total Liabilities 0 4,200

Net Assets/Liabilities (0) (265)

EquityShare Capital 8 1,000 1,000Retained Earnings 8 (1,000) (1,265)

Total Equity (0) (265)


Statement of Financial PositionAs at 30 June 2011

Bay Broadband Limited

11


2010 Actual ($)

Cash Flows from Operating ActivitiesCash provided from:Grants Received 542 17,867Goods and Services Tax Received 0 0

Cash provided to:Payments for supplies and services (4,462) (26,905)Goods and Services Tax Paid 0 0

Net Cash from Operating Activities 9 (3,920) (9,038)

Cash Flows from Financing ActivitiesCash provided from:Share Issue 0 0

Net Cash from Financing Activities 0 0

Net Increase/(Decrease) in Cash and Cash Equivalents (3,920) (9,038)Opening cash and cash equivalents at beginning of the year 3,920 12,958Closing cash and cash equivalents at the end of the year

50 3,920


Statement of CashflowFor the year ended 30 June 2011

Bay Broadband Limited

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Bay Broadband Limited Notes to the Financial Statements Statement of Significant Accounting Policies for the year ended 30 June 2011

Reporting Entity

Bay Broadband Limited (the “Company”) is a company incorporated and domiciled in

New Zealand.

The Company is a CCO (as defined under section 6 of the Local Government Act

2002) based in Tauranga, and is a subsidiary 100% owned by BOPLASS Ltd (also a

CCO) and established by eight Councils to provide shared service arrangements.

The primary objective of the Company is to facilitate and promote the development

of broadband capacity and reach in the Bay of Plenty region, rather than making a

financial return. Accordingly the Company has designated itself as a public benefit

entity for the purposes of New Zealand Equivalents to International Financial

Reporting Standards (NZ IFRS).

The financial statements of the Company are for the 12 months ended 30 June

2011. The financial statements were authorised for issue by the directors.

Basis of preparation

Statement of compliance

The financial statements have been prepared in accordance with the requirements of

the Local Government Act 2002, which includes the requirement to comply with

Generally Accepted Accounting Practice (NZ GAAP). These financial statements

comply with the New Zealand Equivalents to International Financial Reporting

Standards (NZ IFRS) and other applicable Financial Reporting Standards as

appropriate for public benefit entities. The Company is a public benefit entity that

13

Bay Broadband Limited Notes to the Financial Statements

qualifies for and applies differential reporting concessions. The Company qualifies

for differential reporting concessions on the basis that it is not large and not

publically accountable. The Company is also a reporting entity for the purposes of

the Financial Reporting Act 1993 and its financial statements comply with that Act.

Standards where the Company has not taken advantage of differential reporting

concessions and has applied the standards obligatory for non-qualifying entities are:

NZIAS7 Statement of Cash Flow: The Company has provided a Statement of Cash

Flow for the reporting period.

Measurement base

The financial statements are prepared on the historical cost basis.

Functional and presentation currency

These financial statements are presented in New Zealand dollars ($) and all values

are rounded to the nearest dollar. The functional currency of the Company is New

Zealand dollars.

Accounting Policies

The accounting policies set out below have been applied for the 12 months ended 30

June 2011.

Significant accounting policies

Revenue

Revenue is measured at the fair value of the consideration received.

Contributions received from BOP LASS Ltd were the company’s only source of

funding for the 12 months ended 30 June 2011.

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Contributions are recognised as revenue when they become receivable unless there

is an obligation to return the funds if conditions of the contribution are not met. No

such obligation is attached to the council contributions received.

Income Tax

Income Tax expense is calculated using the taxes payable method.

Goods and Services Tax (GST)

All items in the financial statements are stated exclusive of GST, except for

receivables and payables, which are stated on a GST inclusive basis. Where GST is

not recoverable as input tax then it is recognised as part of the related asset or

expense.

The net amount of GST recoverable from, or payable to, the Inland Revenue

Department (IRD) is included as part of receivables or payables in the statement of

financial position. The net GST paid to, or received from the IRD, including GST

relating to investing and financing activities, is classified as an operating cash flow in

the statement of cash flows.

Commitments and contingencies are disclosed exclusive of GST.

Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks,

other short-term highly liquid investments with original maturities of three months or

less, and bank overdrafts.

Bank overdrafts are shown within borrowing as a current liability in the statement of

financial position.

15


Debtors and other receivables

Debtors and other receivables are initially measured at fair value and subsequently

measured at amortised cost using the effective interest method, less any provision

for impairment.

A provision for impairment of receivables is established when there is objective

evidence that the Company will not be able to collect all amounts due according to

the original terms of the receivables. The amount of the provision is the difference

between the asset’s carrying amount and the present value of estimated future cash

flows, discounted using the effective interest method.

Impairment

The carrying amounts of the Company’s assets are reviewed at each balance date to

determine whether there is any objective evidence of impairment. If any such

indication exists, the asset’s recoverable amount is estimated. An impairment loss is

recognised whenever the carrying amount of an asset exceeds its recoverable

amount. Impairment losses directly reduce the carrying amount of assets and are

recognised in the Statement of comprehensive income.

Creditors and Other Payables

Creditors and other payables are measured at the fair value of the consideration

paid.

16


2 Other Revenue

2011 Actual ($)

2011 Budget ($)

2010 Actual ($)

Creditor Forgiveness * 0 0 40,993Grant from BOPLASS ** 542 0 17,867

Total Other Revenue 542 0 58,860

3 Other Expenses

2011 Actual ($)

2011 Budget ($)

2010 Actual ($)

Accounting & AuditAudit Fees * 0 0 4,000Accounting & Tax Fees 0 0 3,052

0 0 7,052

AdministrationAdministration 0 0 (1,600)Bank Fees 48 0 91

48 0 (1,509)

Other ExpensesConsultancy 0 0 430Directors Fees 0 0 7,500General Expenses 429 0 0

429 0 7,930

Total Expenses 477 0 13,473

* Audit fees of $1,860 for Bay Broadband Ltd have been recognised under BOP LASS Ltd financial accounts now that Bay Broadband Ltd has ceased trading.

* Intercompany liability between Bay Broadband and BOP LASS Ltd to recognise costs that BOP LASS Ltd paid on behalf of Bay Broadband Ltd was written off in 2010 and shown as creditor forgiveness.

** BOP LASS Ltd paid a grant to Bay Broadband Ltd to cover the costs of some final expenses.

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4 Income Tax Expense2011 Actual

($)2010 Actual

($)

TaxationCurrent Tax Expense 0 200Adjustments to current tax in prior years (200)

0

Tax loss offset from BOPLASS Ltd 0 0Tax Expense (200) 200

Net Surplus/(Deficit) Before Tax ended 30 June 10

65 45,387

Tax at 30% 20 13,616Plus (less) tax effect of:Non-deductible expenditure 143 0Non-taxable income (163) 0Prior year adjustment (200) 0Tax rate adjustment 0 0Tax loss not recognised 0 0Tax loss offset from BOP LASS Ltd 0 (13,416)Tax expense (200) 200

5 Cash and Cash Equivalents

2011 Actual ($)

2010 Actual ($)

Cash at bank 0 3,920

0 3,920

6 Debtors and Other Receivables

2011 Actual ($)

2010 Actual ($)

GST Receivable (0) 15

(0) 15

* Tax expense of $200 in 2010 financial year. Which has been adjusted for in 2011 financial year.

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2011 2010

Gross Impairment Gross Gross Impairment Gross$ $ $ $ $ $

ReceivablesNot Past due 0 0 0 15 0 15Past due 31-60 days 0 0 0 0 0 0Past due 61-90 days 0 0 0 0 0 0Past due > 90 days 0 0 0 0 0 0

(0) 0 (0) 15 0 15

7 Creditors and Other Payables

2011 Actual ($)

2010 Actual ($)

Creditors 0 0Accrued Expenses 0 4,000Tax Payable 0 200

0 4,200

8 Equity

2011 Actual ($)

2010 Actual ($)

Reconciliation of Equity

Share CapitalBalance at beginning of year 1,000 1,000 Fully Paid up Shares 0 0 Balance at end of year 1,000 1,000

Retained EarningsBalance at beginning of year (1,265) (46,452)Surplus/(Deficit) for the year 265 45,187Balance at end of year (1,000) (1,265)

Share Capital

DividendsNo dividends have been paid or proposed by the Company.

The holders of the ordinary shares are entitled to receive dividends as declared from time to time, are entitled to one vote per share at meetings of the Company, and rank equally with regard to the Company's residual assets.

Share capital comprised of 1,000 Ordinary Shares which has been written off back to BOP LASS Ltd now that Bay Broadband Ltd has ceased trading.

Creditors and other payables are non-interest bearing and are normally settled on 30 day terms. Therefore the carrying value of creditors and other payables approximates their fair value.

19


9

2011 Actual ($)

2010 Actual ($)

Surplus/(Deficit) After Tax 265 45,187

Add/(Less) movements in working capital items:

Debtors and other receivables 15 1,693Creditors and other payables (4,200) (14,925)Intercompany Liability (Ceditor Foregiveness)

0 (40,993)

Net Cash from Operating Activities (3,920) (9,038)

Reconciliation of net surplus/(deficit) after tax to net cash flow from Operating Activities

10 Commitments

The Company has no commitments.

11 Contingencies

The Company has no contingent liabilities or contingent assets.

12 Related party transactions

The Company was established by BOP LASS Ltd and received the majority of

its revenue from the BOP LASS contributing Councils to deliver its objectives

as specified in its Statement of Intent. BOP LASS is the ultimate controlling

party of the Company.

BOP LASS Ltd

2011 Actual ($)

2010 Actual ($)

Payments from: 542 17,867

Payments to: 0 0

BOP LASS Ltd

20


During the 2011 year BOP LASS Ltd provided a grant to Bay Broadband Ltd

to cover the costs incurred during the financial year.

Directors

2011 Actual ($)

2010 Actual ($)

Payments from: 0 0

Payments to: * 0 7,500

Murray Milner

Director Fees of $7,500 were paid to independent director Murray Milner in

the 2010 financial year.

Tauranga City Council

Tauranga City Council provided accounting services to the company for the

year ended 30 June 2011. The services are provided free of charge. An

estimated value of the accounting services provided for the year is $400.

13 Events subsequent to balance date

Bay Broadband Ltd is going to be de-registered from the companies register

in the 2012 financial year now that it has ceased trading.

14 Statement of Performance

Refer to Statement of Intent and Performance on page 2.

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Bay Broadband Limited Notes to the Financial Statements 15 Going Concern

The board of Bay Broadband Ltd reviewed its strategic direction given the

government’s decision to stop the Broadband Investment Fund promoted by

the previous government and promote its own policy referred to as the

Ultra Fast Broadband Initiative (UFBI). The new policy direction proposed

under the Telecommunications (TSO, Broadband and other matters)

amended bill has resulted in there being no future requirement for a

company such as Bay Broadband Ltd to exist to promote the development of

broadband capacity, reach and competitiveness in the Bay of Plenty. The

board therefore recommended to BOP LASS Ltd that Bay Broadband Ltd

cease trading at the 30th June 2010. BOP LASS Ltd agreed with the

decision of Bay Broadband Ltd ceasing trading.

The financial statements have not been prepared on a going concern basis.

The non going concern basis has not impacted on the financial statements.

Bay Broadband Ltd is going to be de-registered from the companies register

in the 2012 financial year now that is has ceased trading.

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Bay Broadband Limited Statutory Disclosures as per section 211(1) of the Companies Act (1993)

Nature of business

Bay Broadband Ltd ceased trading at the 30th June 2010.

Interest register

The following interests of directors were recorded in the interest register of Bay

Broadband Ltd:

David Gatland – director of David Gatland Limited, which provides ICT

consulting services.

Stephen Town – member of the board of Priority One.

Glenn Snelgrove – director and shareholder of Mount Travel Limited; Director

and shareholder of Glenach Limited; spouse is owner and shareholder of

Cherrywood United Travel; Chairman and director of BOPLASS Ltd, Chief

Executive of Western Bay of Plenty District Council.

Employee Entitlements

The company has no employees.

Directors appointed

No directors were appointed in the 2011 financial year two directors resigned

Russell George – 30/06/2010

Peter Guerin – 30/06/2010

Glenn Snelgrove – 30/06/2010

Miriam Taris – 30/06/2010

David Gatland – 30/06/2010

Bill Bayfield – Resigned 30/05/2011

Stephen Town - Resigned 22/09/2010

Murray Milner - Resigned 31/10/2009

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Bay Broadband Limited Statutory Disclosures as per section 211(1) of the Companies Act (1993)

Donations

There were no donations made by the company during the period.

Audit Fees

Audit fees of $1,860 for Bay Broadband Ltd have been recognised under BOP LASS

Ltd financial accounts now that Bay Broadband Ltd has ceased trading.

Annual Report and Financial Statements 30 June...

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